Small businesses will access 20% share of gov’t contracts from 2019

-solutions still being sought to implementation challenges

Dominic Gaskin

Local small businesses and business aspirants eagerly awaiting opportunities to secure more generous shares of government contracts to provide goods and services across the sectors will likely not be able to do so for at least some months yet, according to the Ministry of Business.

Earlier this month the Ministry of Business disclosed in an article prepared for the Stabroek Business that what is styled the Small Business Procurement Programmne under which firms designated small businesses will have access to 20% of state contracts in designated areas is likely to come into full effect next year.

No specific date or timeline has been given for the full and effective implementation of the programme.

“A number of challenges have been identified and solutions are still being sought to reduce any negative impact on the programme’s effectiveness,” the Ministry of Business said, adding that “once up and running, the programme will apply to all agencies funded through the National Budget.” This in effect means that all government ministries and state-funded departments will be required to comply with the programme promulgated under the 2004 Small Business Act.

Government is anticipating that the full and effective implementation of the 20% allocation to small businesses will enhance the viability of the country’s small business sector given the fact that government

is “the biggest spender in the Guyanese economy” and is therefore in a position “to design and implement programmes that deliver benefits beyond the goods, services or works that it procures.”

In its disclosure the Ministry of Business explained that the “challenges” associated with the full and effective implementation of the Small Business Procurement Programme is linked to government’s determination “that small businesses have fair access to government procurement opportunities through a transparent and efficient process that is cost-effective to government and conforms to the laws of Guyana. What it seeks, the Ministry says, is a regime of proper implementation and regular review in order to ensure that it realizes the “outcomes” intended by Section 11 1) of the Small Business Act.

The significance of the Small Business Procurement Programme reposes in the fact that it targets what the Ministry of Business says are “traditionally disadvantaged groups and individuals whom it says “can become economically empowered by becoming suppliers to the government.” Small businesses across the sectors in Guyana have long been complaining about being discriminated against in the allocation of state contracts. A Ministry source told this newspaper that while the new regulations seek to provide readier access for smaller entities, the provisions of the Act do not mean that government will not be seeking to ensure that awardees of contracts under the Small Business provisions have the capacity to deliver.  

The Small Business Act of 2004, under Section 11 (1), states that “the government shall use its best endeavors to ensure that at least twenty percent of the procurement of goods and services required annually by the government is obtained from small businesses.” 

Much of the focus involved in creating a framework within which the programme will work is concentrated on fully developing the competency of its three main components…… measuring the levels of procurement from small businesses; developing strategic measures to provide small businesses with greater access to public procurement opportunities and better chances of winning contracts; and enhancing the capacity of small businesses to successfully manage and execute contracts.

 According to the Ministry of Business a reliable determination of the effectiveness of the programme cannot be determined without a practical mechanism for measuring its outcomes.

“While there is no current estimate of the level of government procurement contracted to small businesses, for the purpose of developing this programme, one has to assume that it is less than twenty percent of total government procurement and design measures to increase it,” the Ministry adds.  

In putting mechanisms in place for the full and effective implementation of the programme the National Procurement and Tender Administration (NPTA) was required to disaggregate procurement data and identify small businesses in the process in order to provide means by which to measure the levels of small business procurement. 

The Small Business Bureau will be required, annually, to verify and register small business suppliers eligible for participation in the Small Business Procurement Programme.

It is intended that quarterly reports on small business procurement will be made public once the programme is launched.


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